Month: April 2022

There’s proof that a membership model can work to bring in direct revenue from readers, which is especially helpful when publishers are hit by shifts in the advertising market. Vox, which launched its contribution program in the spring of 2020 “to mitigate the pandemic’s impact on the advertising business,” has grown its total number of contributors by 40% from March 2021 to March 2022, according to Blair Hickman, executive director of audience strategy at Vox, who declined to say how many unique contributors Vox has or how much those donations amounted to.

“It has become clear this has the potential to scale up and become a meaningful part of our business,” Hickman said. Most of Vox’s revenue, however, still comes from advertising.

The Guardian has more than a million digital subscribers and contributors (who have signed up for recurring payments), with more than half coming from outside the U.K., a spokesperson told Digiday. The company has grown revenue from digital subscribers and contributors by 87% in three years. Last summer, the Guardian announced digital reader revenue grew to £68.7 million (roughly $88.2 million) — a 61% increase year over year. In the next few months, the Guardian will begin testing a metered version of its app.

While publishers like The New York Times have found metered paywalls to be effective at driving subscribers, they can be “blunt force instruments” that may not work for all publishers, said Justin Eisenband, a managing director in FTI Consulting’s telecom, media & technology industry group. 

An alternative is for a publisher to offer paying members premium content, such as subscriber-only newsletters, he said. And that’s just what Quartz is doing: paying members will also get exclusive access to additional benefits from Quartz, such as member-only email newsletters, including The Forecast and Weekend Brief. Its geographic memberships, including Quartz Africa (which launched in February) and Quartz Japan, will remain separate subscription products.

Last year, Quartz was seeing “plenty” of new members convert simply to read an article they searched for specifically, but then quickly unsubscribed. “This became a distraction from where we see the real growth, and that’s in the Quartz loyal membership and the more vertically-oriented subscriptions. We don’t want to be dealing with the one-and-done subscribers,” Seward said.

Instead, Quartz would be “better off” serving them an ad or getting them to become an email subscriber to start the journey of converting them to a paying member down the line, he said. More than half of Quartz’s existing paying members have been doing so for two years.

Eisenband also didn’t imagine there would be a significant increase in churn with this announcement. “If they know the reason their subscribers want to subscribe is because they want to support the mission of Quartz and the journalism, then I would imagine the likelihood of churn is relatively low,” he said. Quartz may be calculating it can “significantly increase advertising revenue without slowing down” the growth of new subscribers and be in a “better-off place by growing advertising revenue without impacting the subscription revenue in a meaningful way.”

To be clear, Quartz is encouraging people to pay up. Beyond the aforementioned member-only newsletters, the publisher also offered a 50% discount on its membership — which costs $14.99 a month or $99.99 a year — in an email sent to registered readers announcing the paywall change. 

But as with other publishers such as The Daily Beast and The Atlantic, Quartz is adopting the approach of warming up its potential paying members to first become registered users. Readers are now served an email registration prompt when they read a second Quartz story, which they can dismiss. A hard email registration is served on their fourth visit.

“By far, the most successful and important customer journey for us is from free reader to free email subscriber to paying member. If someone is going to convert, it takes about four months to go from Daily Brief reader to becoming a member. That’s the customer journey and the marketing funnel that has been the most successful to date and that we want to focus on as much as possible,” Seward said.

• Identifying audiences more effectively — creating higher “fidelity”
• Ensuring compliance within the byzantine world of privacy rules
• Creating more transparency in the process. 

That said, the industry remains in the early stages of applying clean rooms, and this year’s multi-billion newfront/upfront marketplaces, which is set to begin in the next few weeks, will determine what sticks and what shakes out. The holdcos’ media agencies’ goals are high, however.

“Clean rooms represent a logical and ethical way to create win-win value for brands and for people,” said Arun Kumar, IPG’s chief data & technology officer, who serves as a bridge between IPG’s agencies and its Acxiom data company. “So long as the data entering the clean room and the associated use cases pass the high standards for data governance, we believe it is a smart and safe way to create better experiences for customers and value for brands and the economy.”

But they’re also a way to figure out what’s legitimate data and what isn’t, according to Mike Bregman, chief data officer at Havas Media Group. “Clean rooms are a really interesting fragmentation strategy that media partners have taken, because they don’t want to share data with one another or they want to share as little as possible,” he said. “They want to give you enough of that data science capability that you can create your own closed loop. And they they’re all doing it in different ways.” 

Ultimately, the goal is to to get to figuring out ROI value, said Bregman. “Did that give me the lift in business performance that we think will make a meaningful difference to our clients?”

“Using clean rooms is one of the greatest ways to inform buying strategies at the macro and tactical levels,” added Delphine Hernoux, chief data & analytics officer, North America, at GroupM’s Wavemaker. “It’s a great way to understand true value of exposure — as an example — and make better decisions as it relates to investments.”

That’s why this year’s upfront will help determine how and where clean rooms will get applied, said Brad Stockton, senior vp of video innovation for Dentsu Media U.S. “With the upfront, it helps a lot from a planning perspective — being able to understand who’s our real reach against our audiences and who can help us really drive that,” said Stockton. And to be able to use clean rooms where it can really match our data at a super high level of fidelity. It allows us to be more accurate and smarter with our buying decisions when working within the different portfolios.”

What’s still not clear is on which side of planning and negotiating the clean rooms reside — or which vendors, including LiveRamp, Snowflake, Habu and others will come to dominate. In some cases, the media agencies and platforms employ their own clean rooms that “talk” to each other, but in other cases, the client also operates its own. And while Havas Media is working with LiveRamp for its clean room solution, IPG/Acxiom has built its own, and Wavemaker/GroupM and Dentsu work with whichever platform(s) their clients or media platforms are using. 

“We come as a partner adding value by making suggestions to leverage new use cases or use additional clean-room solutions based on media investments since marketers will belong to several clean rooms in the future,” said Hernoux, noting the efforts by Roku and Disney as examples of media companies enabling clean rooms from their end. “[It] reinforces our desire to lean [into] any solution available in the marketplace based on use cases and value.”

Clean rooms among buyers, sellers and clients still have a ways to go in terms of speaking the same language, said Stockton. “The exciting thing in my eyes is what the future looks like: how do you have a common framework to then match clean room to clean room?” he asked. “When do we really start to stand these up and have much more interoperability across them? [That is] where the future of this is going, and where cleanrooms can really help from a measurement perspective.”

Perhaps the most impressive part is the sheer volume of data they have to process — and advances in computer processing and storage have helped immensely, said Havas’ Bregman. And as IPG’s Kumar noted, Acxiom’s standard clean room processes over 3 billion records. “With the work we’re doing across 20-30 clients, that amounts to Acxiom supporting the processing of tens of millions of records across such second-party partnerships every day,” he said.

Color by numbers

It’s important that media agencies have a solid handle on how often their clients track their KPIs. Unsupervised, an AI-driven insights platform for businesses, surveyed 700 marketers about KPIs and found some gaps in knowledge and understanding. Some highlights include: 

• While 61 percent of respondents track social engagement and 60 percent track website traffic, only 42 percent track conversion rate, and 28 percent track return on ad spend;
• 23 percent track KPIs quarterly, while 38 percent apiece track either monthly or weekly;
• 68 percent taught themselves how to calculate and track KPIs, but only 41 percent were “very confident” they calculated them accurately;
• Gloomily, one out of four expect their expenses to worsen over the next six months.

Takeoff & landing

• GroupM’s Wavemaker won media AOR duties for ticket vendor SeatGeek, adding to its growing list of tech company clients including Bumble, Square and Coinbase. 
• Stagwell acquired Polish e-commerce specialist Brand New Galaxy and will fold it into the Stagwell Media Network. The shop had been part of Stagwell’s Global Affiliate Network and is the first of that network to get acquired outright. 
• Horizon Media landed North American media AOR duties for bottled water company Blue Triton (formerly Nestlé Waters), said to be in the neighborhood of $90 million in media spend. Separately, the independent media agency said it plans to negotiate and buy up to 15 percent of its upfront investment using alternative currencies. 
• Digital agency Dept plans to acquire and merge with 3Q Digital to form a new company called 3Q/Dept. The deal is expected to close before the end of June.

Direct quote

“If we look at what Apple has done so far with [its privacy compliance framework] SKAdNetwork, or ATT, it definitely feels like around the time of its launch it gathered a lot of feedback from the market, so there were quite a lot of iterations. That definitely feels like it slowed down a bit since … But there has definitely been more more talk about tightening the enforcement of these rules. How do you enforce them so that companies or players aren’t trying to bypass them, or have workarounds? That’s definitely an area that we see coming up.”

— Shumel Lais, founder/CEO of mobile intelligence platform Appsumer, on the impact of Apple’s ATT changes a year later.

Speed reading

• Marketers are rushing into the metaverse with the help of their media agencies — the latest example of which is Fidelity securing real estate in Decentraland, with the guidance of media agency Havas Media Group. I looked at the thinking behind the move. 
• Is YouTube going to be the biggest video platform in the upfront and beyond? I wrote about a Pixability study that delves into why YouTube is aiming to do just that.
• In his Future of TV Briefing, senior media editor Tim Peterson captured the concerns and hopes TV buyers have about connected TV, expressed at an off-the-record Town Hall session at Digiday’s Future of TV Week event.  

The initial pre-sale to Forbes’ subscribers — the publisher doesn’t disclose its total subscriber base, but the Alliance for Audited Media reported the total number of Forbes’ paid and verified magazine subscriptions is over 506,000 as of Dec. 31, 2021 — sold out the NFTs for 0.25 ETH each (about $765) in under a day, according to chief technology officer Vadim Supitskiy, netting a total of 25 ETH (about $77,000) in sales.

It’s been a week-and-a-half since the drop and so far the secondary resale market hasn’t been as robust from a transaction perspective — 14 of the 100 NFTs have been resold according to the collection’s activity history listed out on FTX.US and its transaction history on OpenSea — but the average cost of those resold NFTs was 6.9 times higher than the original sale price, the equivalent of $5,237 (or 1.71 ETH) at the time of publication. Two of them are currently listed for $10,719 (3.5 ETH) and $11,331 (3.5 ETH) on the OpenSea NFT marketplace.

That makes the secondary market for the Forbes Virtual NFT Billionaire collection worth 23.99 ETH (which was more than $73,000 at the time of publication), about as much as the initial drop brought in. Forbes earns a 10% royalty on resales, but it’s hard to determine how the publisher’s resale market compares in the grand scheme of the NFT market because it simply just isn’t what it used to be in 2021. 

While it might be too early to say that the NFT bubble has burst, the data does show that there is some slowdown in the market. The average selling price of an NFT on April 20 sat at about $1,700, according to NonFungible.com’s market tracker. That’s down from the all-time high of about $6,900 on Jan. 2, Bloomberg reported last month.

“One canary — or maybe it’s more like a crow or a giant ostrich — in the coal mine was the attempted resale of Jack Dorsey’s first tweet. It speaks directly to, what is the real value there?” said David Cohn, senior director of the Alpha Group, the in-house tech and media incubator for Advance Local, and cofounder at Subtext. 

That first-ever tweet from Dorsey, a Twitter co-founder, was bought for the equivalent of $2.9 million in March 2021. Almost one year later at the beginning of this month, the NFT’s owner, entrepreneur Sina Estavi, put it up for auction for $48 million. The highest bid by the time the auction expired was a mere 0.09 ETH (about $277 at the time), according to Coindesk.

But the NFT collections that have maintained a strong performance in the resale market are those that provide a sense of community and exclusivity, in addition to investment potential. One example of this is the Bored Ape Yacht Club, which in the past seven days ending on Friday, April 22 had the top 10 most expensive NFT sales per NonFungible.com with each selling for an average of almost $475,000 a piece.

Fellow publisher Time has been taking a page from this practice and created its TIMEPieces group, made up of about 40,000 Web3 enthusiasts, 12,000 of whom have purchased a TIMEPiece NFT to date, according to president Keith Grossman. He added that NFT sales have driven over 8-figures in profit for the company, though declined to share the exact revenue figures.

The community was created organically, Grossman said, but is rewarded regularly with private Discord-based community events, opportunities to win conference tickets and weekly town halls to learn about new projects and speak with the Time team as well as the artists of the NFTs. What’s more, NFT holders are able to connect their crypto wallets to Time.com and automatically get a digital subscription to the website as a bonus.

And while buying an NFT is not the only way to join the group, the team found that by participating in it, excitement is built around NFT drops, launches and resales, Grossman said.

Time now earns 60% of the money made from NFT sales from its secondary market, the company’s president of digital Bharat Krish told Digiday. He declined to provide exact figures.

“The publisher is the curator of a community and the curation happens by [an NFT’s] value [not being] the art, but its tone and emotional connection [to a community], and really the editorial angle that you’re trying to convey,” said Cohn.

Forbes is still lacking the utility part of its NFT projects, Supitskiy admits and is primarily focused on creating entertaining projects that drive audience engagement versus this being a pure revenue play. The addition of utility in NFTs, such as offering NFTs as tickets to events or as the access key for a membership product, will likely be the path forward in turning NFT and blockchain experimentation into a business of its own.

“The utility part and entertainment part will converge,” said Supitskiy, and NFTs will become tickets to both virtual and metaverse events, as well as serve as the access key for memberships. And ultimately by doing this, “it could really blend that Web2 and Web3 line,” he said.